Energy company wary of Iraqi oil auction

BAGHDAD, Oct. 14 (UPI) -- Iraq aims to boost its oil production capabilities with its next round of auctions next year, though at least one company said the terms "are not ideal."

The Iraqi oil minister this summer announced more than 40 companies qualified to bid for 12 exploration blocks expected on the auction block early next year. Iraq estimates the 12 blocks up for auction could raise reserve estimates by 10 million barrels of oil and 29 trillion cubic feet of natural gas.

Elias Kassis, managing director for Iraqi production at French supermajor Total, said his company was taking a close look at the contracts planned in Iraq.

"They are not conventional terms for exploration," he was quoted by Emirati newspaper The National as saying. "Some people would even say these are not ideal terms for exploration."

The Iraqi Constitution requires the country's oil deposits to remain under the control of the government. Compared with conventional contracts, the technical service contracts award energy companies for every barrel of oil they pump.

Kassis said his company hadn't decided if it was going to take part in next year's auction. The company is expected before a Paris court on charges it bribed Iraqi officials in the so-called oil-for-food scandal, a U.N. program that let Iraq under Saddam Hussein sell oil in exchange for non-military goods.